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Is Darling Ingredients (DAR) Stock Undervalued Right Now?

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The proven Zacks Rank system focuses on earnings estimates and estimate revisions to find winning stocks. Nevertheless, we know that our readers all have their own perspectives, so we are always looking at the latest trends in value, growth, and momentum to find strong picks.

Looking at the history of these trends, perhaps none is more beloved than value investing. This strategy simply looks to identify companies that are being undervalued by the broader market. Value investors use fundamental analysis and traditional valuation metrics to find stocks that they believe are being undervalued by the market at large.

Zacks has developed the innovative Style Scores system to highlight stocks with specific traits. For example, value investors will be interested in stocks with great grades in the "Value" category. When paired with a high Zacks Rank, "A" grades in the Value category are among the strongest value stocks on the market today.

One company value investors might notice is Darling Ingredients (DAR - Free Report) . DAR is currently sporting a Zacks Rank of #2 (Buy), as well as an A grade for Value. The stock holds a P/E ratio of 12.69, while its industry has an average P/E of 19.21. Over the past year, DAR's Forward P/E has been as high as 44.81 and as low as 8.29, with a median of 21.12.

We should also highlight that DAR has a P/B ratio of 1.25. Investors use the P/B ratio to look at a stock's market value versus its book value, which is defined as total assets minus total liabilities. This company's current P/B looks solid when compared to its industry's average P/B of 2.20. DAR's P/B has been as high as 1.94 and as low as 0.87, with a median of 1.39, over the past year.

Value investors also love the P/S ratio, which is calculated by simply dividing a stock's price with the company's sales. This is a prefered metric because revenue can't really be manipulated, so sales are often a truer performance indicator. DAR has a P/S ratio of 0.98. This compares to its industry's average P/S of 1.07.

These are only a few of the key metrics included in Darling Ingredients's strong Value grade, but they help show that the stock is likely undervalued right now. When factoring in the strength of its earnings outlook, DAR looks like an impressive value stock at the moment.


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